As banks talk with Facebook, time to review your privacy rights

Gramm-Leach-Bliley Act lets you opt out of some data sharing

With Facebook asking banks to share customer information,
now is a good time to review your privacy rights when it comes to financial
data.

Banks and card issuers can share your sensitive information – including identity, Social Security number
and payment history. When the sharing is for business purposes, such as
updating your credit report or completing transactions, you don't have a
choice.

But under the Gramm-Leach-Bliley
Act, you can opt out of having your information shared for certain marketing
purposes outside the company and its affiliates.

Facebook looks to
partner with banks

On Aug. 6, the Wall Street Journal reported
that Facebook has been talking with banks about sharing customer information
back and forth. The moves come as Facebook seeks to deepen engagement with its
user base.

The company issued a statement saying the story was
overblown. Facebook is seeking to partner with banks to allow Messenger chat
service to be a platform for bank customers to communicate with customer
service.

"The idea is that messaging with a bank can be better
than waiting on hold over the phone," Facebook spokeswoman Elisabeth Diana
said in a statement, "and it's completely opt-in." She denied that
Facebook is actively seeking transaction data.

But Facebook does already partner with PayPal
to carry out transactions via the platform. And industry analysts expect more
collaboration between financial services and social networks.

What you should know about privacy rights

Privacy opt-out can limit bank sharing your data with Facebook.

Under Gramm-Leach-Bliley, you can opt out of some data sharing by financial institutions.

"If they are a non-affiliate, the financial institution
could not share information with Facebook if you had opted out from information
sharing," said Paul Stephens, director of policy and advocacy at Privacy
Rights Clearinghouse, a nonprofit privacy advocate based in San Diego.

However, service providers and joint marketing partners are
not covered by opt-out rights, if they are involved in certain business
purposes.

The structure of whatever partnership emerges between banks
and Facebook will determine the limits of GLBA opt-out rights.

Potentially, Facebook might have to issue its own opt-out
notices, if its role meets the definition of a financial service under the law,
Stephens said.

Fewer privacy notices, but
more noticeable

Knowing what you can keep private and what you can't is
complicated. Fortunately, notices of your privacy rights are becoming more helpful.

Under a federal
regulation issued last week that finalizes a 2015 law, financial
institutions can skip sending you a notice of your privacy rights – in certain
circumstances. The law took effect in December 2015.

The exception means you should only receive an annual notice
if the institution shares your information in ways that you can prevent.

You should get the privacy notice:

When you
sign up for a new bank account or credit card.

Annually,
if the company shares information in ways you can prevent.

If the
company's practices change from its previous notice to you.

The change is designed to "put an end to redundant
mailings and it would also make it more likely for people to pay closer
attention to mailings they receive from their financial institutions because
they would be receiving fewer," said Rep. Blaine Luetkemeyer, R-Mo.,
sponsor of the legislation.

While notices must be delivered annually, consumers can
exercise their opt-out rights at any time.

Whether it's delivered by regular mail or a link to an
online page, the boilerplate notice is easy to ignore. But with privacy
concerns heating up, it may be wise to pay more attention.

"If they are a non-affiliate, the financial institution could not share information with Facebook if you had opted out from information sharing."

How opt-out rights
can protect you

Opting out of third-party information sharing under GLBA
should prevent tie-ins of the sort that the WSJ article outlined.

"I would strongly advise anyone from sharing financial
information with Facebook," Stephens said. "They already have so much
information about us – it could be a marketing gold mine for them, but not in
the best interest of consumers."

Of course, if you opt in for a financial service such as
getting account alerts via Messenger, the sign-up process will mean giving the
necessary permissions for the service to operate, overriding any blanket
opt-out choice.

"I would strongly advise anyone from sharing financial information with Facebook. They already have so much information about us – it could be a marketing gold mine for them, but not in the best interest of consumers."

Even such routine communications could be mined to reveal
details about your financial picture that you might not want to share beyond
your bank, Stephens said.

"If I'm engaging in any sort of conversation with my
financial institution, I don't want Facebook to be privy to the content of that
conversation," he said. With most banks having their own mobile apps and
chat options, there's no need to go through intermediaries, decreasing privacy
and security, he said.

"Financial institutions that choose to take advantage
of the annual notice exemption must still provide any opt-out disclosures
required under the Fair Credit Reporting Act," said a blog
post by Ballard Spahr attorney Barbara Mishkin.

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